Jonathan Sher, QMI Agency

LONDON, Ont. — A deal is in the works to sell a shuttered London, Ont., locomotive plant, with sources saying the prospective buyer is local and plans to lease the land to General Dynamics.

Electro-Motive Diesel's Oxford St. factory has been mothballed since Feb. 2012, when industrial giant Caterpillar closed it, creating a gaping hole in London's industrial base and robbing the city of a plant that had churned out locomotives for 61 years.

While the sale hasn't been finalized, an agreement in principle has been reached that would bring a welcome jolt to the region's economy.

"I think it would be great news for the city," said Peter Whatmore, a senior vice-president with commercial realty giant CBRE Ltd, which is handling the proposed sale.

The closing of the plant in 2012 came after Progress Rail locked out workers for 34 days after their union rejected a take-it-or-leave-it deal that would have slashed many wages by up to half.

The plant had employed 460 Canadian Auto Worker members and another 200 salaried workers.